Mortgage application activity decreased 3% from one week earlier as rates for conventional loans continued to move higher, according to the Mortgage Bankers Association.
The MBA's Weekly Mortgage Applications Survey for the week ending Jan. 25 found that the refinance index decreased 6%
The refinance share of mortgage activity decreased to 42% of total applications from 44.5% the previous week.
Lower rates in December and the first half of January helped to spur application volume for both refinancings and purchases.
"Refinance activity had seen a small resurgence in the past few weeks, but there still remains only a small share of borrowers left to gain from rates at the current levels," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.
The seasonally adjusted purchase index decreased 2% from one week earlier, while the unadjusted purchase index decreased 6% compared with the previous week and was 7% lower than the same week one year ago.
"After two weeks of decreases, the purchase index still remained roughly 6% above its long-run average, which is good news with the spring buying and selling season almost underway," Kan said. "Despite ongoing supply and affordability constraints, the healthy job market and underlying demographic fundamentals both point to gradual purchase growth in the coming months."
Adjustable-rate loan activity decreased to 7.9% from 8.3% percent of total applications, while the share of Federal Housing Administration-guaranteed loans remained unchanged from 10.5% the week prior.
The share of applications for Veterans Affairs-guaranteed loans increased to 10.7% from 10.3% and the U.S. Department of Agriculture/Rural Development share remained unchanged from 0.4% the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) increased 1 basis point to 4.76%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350), the average contract rate increased 1 basis point to 4.6%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased 5 basis points to 4.77%. For 15-year fixed-rate mortgages, the average increased 4 basis points to 4.16%. The average contract interest rate for 5/1 ARMs increased 2 basis points to 4.14%.
